Insurance expert outlines pros and cons of ICBC no-fault move

VANCOUVER (NEWS 1130) —  A day before ICBC is set to move to no-fault insurance, one expert working out of North Vancouver is outlining the good and the bad that will come with the shift.

Colin Brown is the president and CEO of Stratford Underwriting, and says that while there are some short-term gains, there will be some long-term pain – in particular, for those who believe they are entitled to more than they can get under these new rules if they are seriously injured in a crash and are not at fault.

Ultimately, he says it comes down to an overall reduction in coverage so that the public insurer can readjust its somewhat depleted coffers.

“ICBC [was] losing a billion dollars a year in 2018, 2019, 2020…and now will have excess profits of half a billion,” he tells NEWS 1130.

Brown says the 50 per cent of people who are not responsible for crashes will have essentially given up their right to sue the person who is at fault.

“They’ll just be getting a meat chart, a WCB-style chart of payments for whatever ails them if they’re injured. So the savings to ICBC is, well, $400, times about 3 million motorists, $1.2 billion, of which they’re putting a bunch into extra benefits for people. You get more weekly benefits if you’re off work; you get medical expenses,” he explains.

There's not much time left before @icbc moves to enhanced care aka no-fault insurance – it fully kicks in tomorrow. (Sat. May 1.) Colin Brown w/Stratford Underwriting is outlining the positives and negatives of the switch this afternoon on @NEWS1130.

— Ria Renouf ???? (@riarenouf) April 30, 2021

To simplify it, Brown says to think about it like a purchase you’d make each week at a grocery store.

“If you’re used to say, buying a 20 pound bag of potatoes every week, and you go in and they say, ‘Well, we don’t have that anymore, but we’ll go ahead and give you 10 pounds for four dollars less, you are getting less and you’re paying less,” he says.

As for how he thinks ICBC should have rolled this out, Brown – who worked for the CRown corporation for 22 years – says these changes should have been made gradually.

“My own sense is that they should have carried on with the minor injury cap, which they started on September 1st of 2018. It was a way to reduce the number of small injuries, and still cover people for worse injuries. I prefer that, that’s the way it is in Alberta, about a $5,000 cap. This takes everything away, it’s a snap of the fingers and it’s all gone.”

Brown says that in the long-term, if you’re seriously injured in a crash that’s not your fault there’s a lot to lose. He uses the example of someone making $130,000 annually.

“If they were catastrophically injured, not able to work again, lost the use of their legs, lost an arm, whatever…it’s capped at what they can get back. So if you’re say, 45, and earning that money, you may get up to five years of salary.”

RELATED: ICBC to implement no-fault-type system next year

He suggests people go through private insurance companies to try and save some money and to get some extra protection.

“There will still be fault, because as ICBC pointed out, for the purposes of rating for next year, they still have to decide that someone was at-fault in the accident,” he explains.

“I think, more than ever, people should consider getting private insurance to have another company eyeball your situation and [check]. A single entity in the province should not be deciding everything for someone in an accident.”

ICBC is forecasting savings at more than $1.5 billion in the first full year of Enhanced Care. Some of that money is set to be used to help reduce costs, but ICBC says it will be part of a fund that can help stabilize rates in the future, in the event we see volatility again.